Microsoft needs Yahoo. Despite its dominant position in both the operating system and desktop application realms, the computing world is changing, and if you look closely you too can see it. The web browser is becoming more powerful, designers and programmers using their skills to greater affect to get the most from the browser technology. With this shift to a browser based computer experience, more applications are being ported from the desktop to the web; see Google Docs, Salesforce.com, Flickr, Basecamp, and many more. This shift isn’t unlike the same one that took place when computing world moved from mainframe to personal, desktop based computing.

When Microsoft gets Yahoo, which may take a year or more after regulators in the U.S and Europe finish digging their teeth into the deal, they’ll have to “integrate” Flickr into Microsoft. If they don’t, Microsoft will be wasting their money. When Yahoo bought Flickr they could afford to leave Flickr to its own devices because the two companies operate on a primarily web based business model. Microsoft’s business model is not web based, and when they’ve tried to make the shift the results have been a failure, for the most part. See the latest, Windows Live. That’s why Microsoft needs Yahoo; it’s an admission of failure.

What might the integration of Flickr into the Microsoft world look like? From jump street there are going to be problems: what ID system will you use to login to Flickr? Well, given that Microsoft is buying the Yahoo users, I predict you’ll be moving over to the Microsoft system.

Expect new features to roll out at a much slower pace. More advertising. More integration with Microsoft proprietary technology (fewer implementations of open standards). A new Office program that will integrate the desktop and Flickr (of course, it will be clumsy and crash a lot). A change in the Flickr terms of use that will allow Microsoft to use your photos across its various sites.

Stay tuned. Things will get interesting. We’ll be having a new podcast up by Sunday night or Monday morning, covering all the latest news in the Microsoft/Yahoo mess.